U.S. Jobless Rate Surges to 14.7% in Worst-Ever Labor Reversal

In the harshest downturn for American workers in history, employers cut an unprecedented 20.5 million jobs in April and the unemployment rate more than tripled to 14.7%.

Joblessness now stands at the most since the Great Depression era of the 1930s after the coronavirus pandemic brought the U.S. economy to a standstill. As recently as February, the rate stood at just 3.5%, the lowest level in five decades.

April’s losses — following a March payrolls decline of 870,000 — erase roughly all of the jobs that the economy had added in this past decade’s expansion and lay bare just how precarious employment is for vast swaths of Americans. The report showed an outsize impact on lower-paid workers as well as women and minorities.

With a steep recession now in progress, the destruction of jobs heaps election-year pressure on President Donald Trump to restart the economy and show results by November. But with little containment of a contagious disease that’s killed 75,000 Americans and counting, business is returning unevenly and slowly if at all, and signs are mounting that many employers will be forced to make the cuts permanent.

Stock investors have largely looked past the dire economic news, with equities rallying since late March. The S&P 500 opened higher on Friday, while the yield on benchmark 10-year Treasuries rose and the Bloomberg dollar index pared its decline.

The data showed average hourly earnings rose a massive 4.7% from the prior month and 7.9% from a year earlier — more than double March’s pace — but those figures were skewed higher by the disproportionate loss of low-wage workers from payrolls, rather than any wage pressures boosting employee pay.

One particular group of lower-paid workers — leisure and hospitality employees, such as those in restaurants and hotels — declined by 7.65 million, almost half of total employment in the sector.

The underemployment rate, which includes discouraged workers and those working part-time who want full hours, rose to 22.8% from 8.7%.

The labor-force participation rate fell to 60.2% — the lowest since 1973 — from 62.7%. Among prime-age men, those ages 25 to 54, it dropped to a record-low 86.4%.

Almost every industry was hit hard. Manufacturers cut 1.33 million positions and retailers 2.1 million. Even health-care jobs fell by 1.44 million as non-Covid visits and elective procedures dried up or offices closed.

The jobless rate among women jumped to 15.5% from 4%, compared with a 9-point increase among men, to 13%. Among black and African Americans, the unemployment rate was 16.7%; it was 18.9% for Hispanics and Latinos, compared with 14.2% for white Americans.

U.S. Jobless Rate Surges to 14.7% in Worst-Ever Labor Reversal, CNBC, May 8